Are public lands corporate welfare for outdoor gear companies?

Jonathan Wood

11 months ago

PERC’s Terry Anderson says “yes” in a recent Wall Street Journalarticle proposing a modest tax on camping and other outdoor equipment to pay for the significant maintenance backlog facing public lands. As more and more federally owned lands are taken out of productive use, these maintenance costs will have to be covered from some other revenue source. Why not recover them from the industry and consumers benefiting from the expenditures?

He explains:

[P]rofits from recreation are what drive the politics of federal land management. More wilderness for backpackers means that wealthy, healthy Gen Xers and millennials will buy more backpacks, tents, boots, mountain bikes and high-tech clothing for trekking into the backcountry. . . But the foundation of these profits is an enormous subsidy from the American taxpayer. Every year the federal government spends millions to support recreation, without earning much revenue from those campers, bikers and hikers. For every dollar that the U.S. Forest Service and Bureau of Land Management spent on recreation from 2009-13, they took in less than 30 cents, according to a 2015 study by the Property and Environment Research Center, where I work. In contrast, for every dollar Washington spent on managing mineral lands, it earned $19.76. In short, companies like Patagonia benefit from taxpayer subsidies for recreation.

Another ancillary benefit of tying spending on federal recreation lands to funding from the users of those recreation opportunities is that it will, in an albeit indirect and imperfect way, reveal the strength of people’s preferences for more federal lands devoted to “wilderness” recreation. (As Anderson points out, hikers and campers insist that the “wilderness” have nice trails, bathrooms, and other amenities, all of which are paid for by taxpayers.)

At present, we do not know whether the massive subsidy given to recreationists and the corporations that service them is worth it. To make that determination, we need some objective indication of how highly valued a particular piece of additional recreation land would be. In the free market, this information is revealed through marginal prices.

But political decisions implicitly depend on information that is not easily revealed and which special interests have an incentive to conceal. If they inflate the perceived value of their preferred policy, they can receive greater government benefits paid for by someone else—a problem known as “rent seeking.” Anderson’s article indicates that this is precisely what happens with the massive subsidy given to outdoor companies through federal land use decisions.

Shifting some or all of the cost of these benefits to the people who enjoy them will better reveal how strong the preference for more public recreation lands is. If those of us who enjoy outdoor recreation value it highly enough, we should be willing to pay for it without the massive government subsidy. If we don’t, some of these lands and the government money used to maintain them should be put to other, higher-value uses.